As an Operating Partner with Baird Capital, Fred Robertson works with the Venture team to source and evaluate new investment opportunities and contribute his operating experience to portfolio companies. Prior to joining Baird Capital, Robertson served in a variety of roles in the healthcare industry, including Assistant Professor of Anesthesiology at the Medical College of Wisconsin and President and CEO of GE Marquette Medical Systems. Most recently, he was Chief Executive Officer of TomoTherapy, taking the company public on NASDAQ and leading it until its eventual sale to Accuray.

Robertson recently shared his thoughts on the current state of the healthcare industry, where he sees opportunities for growth, and Baird Capital’s broader venture capital investment strategy.

With your extensive background, you could have gone anywhere for this next step in your career. Why did you choose Baird Capital?

I had been involved with Baird for the last two decades, working closely with its investment banking unit when I was with Marquette Medical Systems and its venture arm with TomoTherapy. Through these past experiences, I was given the unique insight of seeing multiple areas of the firm work together to provide very positive and helpful client service.

After leaving TomoTherapy, I was looking to continue my career with a proven, respected leader within the Wisconsin business community, and Baird Capital seemed like an obvious choice. The corporate culture here closely aligns with my view of the business world. It is a place where a handshake is as good as a contract and there is always a clear eye toward the future when any decisions are made. Characteristics like these are essential traits of any successful organization and those were clearly evident when I joined, so I knew I was partnering with a leader.

How would you describe your role as an Operating Partner with Baird Capital?

As a result of Baird Capital’s collaborative environment, my position here can be quite broad in supporting a number of elements of our overall investment strategy. Take for example Baird Capital’s recent venture investment in Zurex Pharma. Working simultaneously with both parties, I was actively involved in conducting due diligence on the organization prior to investing, engaged in building a strategy around corporate governance, and played a lead role in recruiting executive management.

Another component of my duties as Operating Partner is helping source deal flow. This involves extensive research and tapping into various industry networks and investors to identify promising opportunities that our team can work with. As such, I am affiliated with the Wisconsin Alumni Research Foundation (WARF) and serve on the board of BioForward. These organizations are crucial to spurring innovation within the healthcare industry and working with Wisconsin legislators to create a regulatory environment that attracts capital to the state; they are fountains of opportunities and ideas that can benefit from targeted financial backing.

Healthcare continues to be a very dynamic sector. What is your outlook for the industry and how does it inform Baird Capital’s venture strategy for the space?

Healthcare is such a high-growth industry in this country, providing an avenue for groundbreaking research and progress. At the same time, there is a system wide emphasis on cost control, so efficiency is always top of mind. We have strived to position Baird Capital to benefit from current trends, with a focus on developing companies that produce disruptive medical technologies. We see the most room for growth in early-stage trends like infection prevention and minimally invasive medical procedures, along with other trailblazing processes and devices. Virology, stem cell research and informatics are all subfields with unique growth prospects that we consistently monitor for new opportunities. Baird Capital targets companies that possess revolutionary visions in combination with a good organization. As a result, we enter every investment with the end goal in mind.

With the Affordable Care Act, regulatory measures have been thrust into the spotlight and many with ties to the healthcare industry are concerned about the long-term impact this legislation may have. For us, these regulatory measures simply reflect the same level of attention we’ve been putting in all along when conducting due diligence on our investments. We see the Affordable Care Act as an opportunity rather than a hindrance, believing it will bring more people and investment into the healthcare system, a result that aligns with our overall strategy.

Are there subsectors that present more venture investment opportunities for Baird Capital than others? Which ones, and why?

In terms of healthcare, we are not interested in products and services that are easily commoditized. Instead, we look to grow with companies that possess a unique competitive advantage in their fields. There is currently a movement toward investing in the overlap between healthcare and IT. When I joined Baird Capital in 2011, the Venture team had also recruited Don Layden as an Operating Partner. Today, I work closely with Don, who has an extensive background in information technology, to identify new opportunities that can help our investments grow.

For example, “big data,” a term used to describe the mass quantities of information generated at an increasingly exponential rate throughout our society, is a major new development in healthcare that can help create efficiency and deliver better outcomes for patients. While big data brings with it incredible potential, it also forces us to answer complicated questions, such as how to gather these large amounts of data, how to analyze it, and how to act on it. Though these may be challenging hurdles, we believe our team is well positioned to overcome and take advantage of exciting new technologies like big data with the cooperation that exists within the group.

At the end of the day, what’s the most important thing for investors to know about Baird Capital’s Venture team?

We have laid out a clear strategy and built an experienced group with a long track record. This mixture instills confidence in all team members as they grow fresh, creative ideas. It should be noted that this collaborative nature is not exclusive to Baird Capital – we have the strength of the entire Baird platform behind us. We are able to both draw on and provide internal resources across the board, from investment banking to equity research. I can say with confidence that our ability to work together across the firm is a distinguishing factor that not only sets us apart, but more importantly helps us achieve great outcomes for our clients.

Wisconsin has announced several new initiatives focused on increasing venture activity. Given your extensive work in the start-up community in Wisconsin, what does this mean for investors?

Right now is a very exciting time for start-ups in Wisconsin. There is an abundant supply of intellectual capital in organizations like WARF, the State of Wisconsin Investment Board (SWIB), and the Morgridge Institute for Research. The University of Wisconsin education system and its Foundation, which consistently ranks third or fourth in the nation in federal funding for research, is also a dedicated resource – WARF and UW combined for $1.1 billion in research expenditures in 2011 alone. SWIB and WARF also recently launched a $30 million venture fund aimed at growing early-stage IT companies located primarily in Wisconsin. Financial commitments like these help feed the state’s insatiable appetite for scientific knowledge and progress.

As I am intimately involved with these organizations, I am able to see firsthand how these initiatives help change research into reality and contribute to making Wisconsin a leader in healthcare nationwide. Other members of our team like Mike Liang, Jim Pavlik and Benedict Rocchio are also very active in the Wisconsin venture community. Though Baird Capital has a global presence, we remain deeply committed to the Midwest, Wisconsin in particular, because we know the people here and what they are capable of achieving.